4. Derek is the owner of the only movie theater in town. By hiring several well-trained economists, Derek learns that the people watching movies after 8 P.M. have a much higher average willingness to pay than people watching at 5 P.M. The costs of showing a movie are identical at 5 P.M. and 8 P.M. To maximize his profit, what should Derek do? Give him some specific advice, including drawing him a diagram or two. (Derek can get his economists to interpret your diagrams as long as you label all the axes and all the curves.)

Jon D'Man grew up in a small town in eastern Oregon. Jon played sports and was good

enough to earn a scholarship in baseball to his favorite university in Utah. Marsha Mello grew up in

New York City, as a

Manhattenite. Although growing up in New York had its advantages, she

longed to see the wide open spaces of the western United States, and she applied to the same

university in Utah that Jon was attending. Marsha was a big fan of baseball and loved attendi

ng

games to support her school. She fell in love with the star player, Jon.

One fateful game Jon was sliding into third and caught a spike and tore the ligaments in his

knee and ankle. This accident ended his professional dreams at the young age of 17. Jon

and Marsha

decided they would get married in four (4) years when they graduated. Jon had a settlement from his

injury and a good

-

paying, part

-

time job. Marsha had a large inheritance from her grandmother, to be

used only for educational related expenses.

They decided to buy a home together even though Jon

was only 17 and Marsha was 21. But they wondered what they needed to do to buy a home.

Jon and Marsha were both accounting students and were taking a wonderful Business Law

class together from a wonderful

professor

-

the same one you now have. They had a limited

knowledge of contracts, but they knew they should employ a Real Estate Agent to facilitate their

purchase. They called a local hot

-

shot realtor to help them find the perfect property to start their l

ife

together. After much searching, they found a 3 bedroom 2 bath home on a nice cul

-

de

-

s8c in a

quiet, newer neighborhood on the outskirts of town.

They sat down with their Agent to fill out their offer to purchase on a Utah Real Estate

Purchase Contract

(REPC). They discussed the home and its amenities. They loved the fact that the

home had an outdoor, portable hot tub under the stars. It could be easily moved under cover into

the carport in bad weather. They also loved the appliances that were in the kit

chen. They

particularly loved the 6

-

burner, Maytag gas range. They decided to ask for them to be included in

the purchase price. The home was listed on the Multiple Listing Service (MLS) for which seemed to

be a little high for the neighborhood. Jon and Ma

rsha decided to offer $207,000 with the seller

paying 3% towards closing costs and for title insurance and for property taxes and for needed

repairs.

Jon signed the REPC on the line for the Buyer (see Page. 6). In paragraph 25 of the REPC,

Jon put the time

for acceptance as 12 PM, 25 February 2011.

The REPC said on P.l that the BUYER had included a post

-

dated check for $5,000. The

broker marked the box “delivered” even though Marsha did not have her check book with her. She

promised the agent that she would

bring it to him ASAP.

Buyer’s Broker delivered the REPC to Seller's Broker, through a sales agent on the day after

the REPC was completed by Jon and Marsha.

Jon and Marsha had specifically marked the applicable boxes on page #1, Paragraph 1.2 for

the wash

er; the dryer; the frig; the water softener; and the security system. They also marked the

required boxes throughout the REPC.

NOTE #1 TO STUDENTS

You will want to read the REPC and the two addenda and ask questions as the different

sections of the REPC ar

e covered in the related chapters of the text book.

Seller received the offer on the 21 February 2011.

Seller marked, I accept with the following conditions. Buyers' will have one (2) day to accept

terms contained in Addendum #1.

See ADDENDUM #1:

Seller

returned REPC with Addendum #1 to Buyer's Broker.

Jon marked, I accept on Addendum #1 with the following conditions.

See ADDENDUM

#2

Jon had his acceptance notarized the next day and gave it to his Broker, who gave it to the

Seller's Broker. Seller's Broke

r got busy and distracted, and he forgot to give it to the Seller until 10

AM. Broker reminded Seller that she only had until 12 AM to respond. Seller said that

was

ok, because she would put it in the mail by 11 PM, and that would be the time of acceptance.

(She knew the mailbox rule) She mailed the acceptance at 10:15 PM. She immediately had seller's

remorse and changed her mind. She called the Buyer at 12:30 AM and

said on her answering

machine, “I reject your offer. The deal is off. I will not sell my home at any price.” The BUYERS

had not yet received SELLER'S acceptance.

Right after Buyers had mailed their last offer to Seller, but before seller had mailed an

ac

ceptance (see addendum #2), UB Flash announced it was building just down the road from

Seller's house. Because of this announcement, the value of the Seller's house jumped $100 K.

Marsha heard about UB Flash's plans and quickly called Seiler's Broker on th

e phone and told him

that she would like to accepted seller's offer on seller's terms (see Addendum #1). She told Seller's

Broker she could close by 15 April 2011. Seller's Broker was way excited to make a sale. And

without contacting seller, Seller's Brok

er told Buyer, “I accept your offer. You have just bought

yourselves a house.” Marsha said, “Fantastic. I’ve got all the money for the house in a trust.”

That same day, Buyer #2 who is an undisclosed agent for UB Flash, offers the Seiler over

the phone $30

0K cash with no conditions, as is, close in 10 days. Buyer #2 promises a $20,000 non

-

refundable earnest money with the oral offer. Seller does not know of her Agents actions with

Marsha; therefore, she, the Seller, promises to sign the REPC as soon as buye

r #2 mails it to her.

She tells buyer #2, “I accept with no reservations or conditions.”

Jon learns of seller's intent to sell to Buyer #2 and sues to enforce his rights under his REPC

1.Is there a contract between any of the parties? If there is a contract(s), describe and detail the operative legal principles, how you arrived at that conclusion, and identify the parties to that contract and the contract’s terms.

2.There were several purportedly contractual negotiations or transitions in the case description. If you decided that some of those transactions do not qualify as a contract, detail and describe why.

3.Identify any defenses to enforcement that any of the parties may have and against whom they would be asserted, and whether those defenses would be successful and why.

4.Identify the available remedies that any party could request of a court, and whether a court is able or likely to provide that remedy and why.

5.Describe how the concept of agencyeffected the parties’ legal positions in the case study. Did the agents help or harm their clients? Why?

6.If you were the judge on this case and all the parties named in the case description were party to the lawsuit, how would you resolve the case and why? Who would end up with the property and on what terms? Who would get nothing and why?

FACT PATTERN :

Farmer Umi owned a beautiful property just outside of a small town in northern Ontario. At the very back of his property, there was a trail that ended at his property line. He posted a sign “NO TRESPASSING, VIOLATORS ASSUME ALL RISK”. Despite this sign, people were running snowmobiles through his property all night long. Farmer Umi was fuming! He could no longer peacefully enjoy his land. He erected a barbed wire barrier, covered in brush at the edges of his property and had a bigger barrier inside his property. Samantha was operating a snowmobile and was able to avoid hitting the barbed wire barrier, but she slammed into the inside barrier. The snowmobile – out of control - crashed into Farmer Umi’s barn and started a fire. Samantha was severely injured from the crash. Farmer Umi started to put out the fire. When Samantha begged Farmer Umi to take her to the nearest hospital, Farmer Umi refused. Samantha was outraged and very hurt from the accident. Samantha held a dull knife to Farmer Umi’s throat, threatened him and forced Farmer Umi to give her the keys to his car and help carry her to the car. Samantha made her way to the hospital to be treated for her injuries. Farmer Umi was not successful in putting out the barn fire.

QUESTIONS:

(1) Identify all of the possible tort actions in this scenario. In your analysis, be sure to identify the tort, who can bring an action, and what elements of the tort need to be proven in order to be successful in each claim?

(2) For each claim, what defences can be raised and why?

(3) You are the judge. Choose one of the claims and prepare a decision that explains your reasoning?

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been grossing over $850 per day about 55% of the business days it is open. Estimate the probability that the store will gross over $850 for the following. (Round your answers to three decimal places.) (a) at least 3 out of 5 business days (b) at least 6 out of 10 business days (c) fewer than 5 out of 10 business days (d) fewer than 6 out of the next 20 business days If the outcome described in part (d) actually occurred, might it shake your confidence in the statement p = 0.55? Might it make you suspect that p is less than 0.55? Explain. Yes. This is unlikely to happen if the true value of p is 0.55. Yes. This is likely to happen if the true value of p is 0.55. No. This is unlikely to happen if the true value of p is 0.55. No. This is likely to happen if the true value of p is 0.55. (e) more than 17 out of the next 20 business days If the outcome described in part (e) actually occurred, might you suspect that p is greater than 0.55? Explain. Yes. This is unlikely to happen if the true value of p is 0.55. Yes. This is likely to happen if the true value of p is 0.55. No. This is unlikely to happen if the true value of p is 0.55. No. This is likely to happen if the true value of p is 0.55. Need Help? Read It View Previous Question Question 10 of 34 View Next Question Home

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been grossing over $850 per day about 70% of the business days it is open. Estimate the probability that the store will gross over $850 for the following. (Round your answers to three decimal places.)

(a) at least 3 out of 5 business days

(b) at least 6 out of 10 business days

(c) fewer than 5 out of 10 business days

(d) fewer than 6 out of the next 20 business days If the outcome described in part (d) actually occurred, might it shake your confidence in the statement p = 0.70? Might it make you suspect that p is less than 0.70? Explain.

Yes. This is unlikely to happen if the true value of p is 0.70.

Yes. This is likely to happen if the true value of p is 0.70.

No. This is unlikely to happen if the true value of p is 0.70.

No. This is likely to happen if the true value of p is 0.70.

(e) more than 17 out of the next 20 business days If the outcome described in part (e) actually occurred, might you suspect that p is greater than 0.70? Explain.

Yes. This is unlikely to happen if the true value of p is 0.70.

Yes. This is likely to happen if the true value of p is 0.70.

No. This is unlikely to happen if the true value of p is 0.70.

No. This is likely to happen if the true value of p is 0.70.

Friends form a partnership called ABC to develop two apartment complexes in their home town, they do not enter into a written partnership agreement. Instead, they simply agree that they will equally share in the profits and losses of the partnership. A soon discovers that B and C are extremely capable and hard workers and begins cutting down the time that he devotes to the partnership. Soon, A is coming into the office only one day a week. He spends the other days hanging out. A brags about what an accomplished apartment complex developer he is, and attracts the attention of two other players, D and E, who also want to get into the business of developing apartment complexes. A convinces D and E to hire him as a consultant, and D and E agree to pay him $2K/week for his consulting services, which money A keeps for himself. During the course of his consulting, A provides D and E with plans for an apartment complex marked “SECRET” that were created by ABC, in order that D and E can use them as a basis for their development. Eventually, at the urging of D and E, A leaves ABC before the two apartment complexes have been completed and becomes partners with D and D in developing apartment complexes that will directly compete with ABC.

1.Has A breached any fiduciary duties to ABC and B and C? Which ones? What specific facts support the breach of each duty that you identify?

2. Is A entitled to be paid for his partnership interest in ABC? If so, how will the buyout price for his interest be calculated? When is A entitled to receive payment?

3. Breakdown of a cartel agreement

Consider a town in which only two residents, Sam and Teresa, own wells that produce water safe for drinking. Sam and Teresa can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.

Suppose Sam and Teresa form a cartel and behave as a monopolist. The profit-maximizing price is

per gallon, and the total output is

gallons. As part of their cartel agreement, Sam and Teresa agree to split production equally. Therefore, Sam's profit is

, and Teresa's profit is

.

Suppose that Sam and Teresa have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Sam says to himself, "Teresa and I aren't the best of friends anyway. If I increase my production to 50 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."

After Sam implements his new plan, the price of water   to

per gallon. Given Teresa and Sam's production levels, Sam's profit becomes

and Teresa's profit becomes

.

Because Sam has deviated from the cartel agreement and increased his output of water to 50 gallons more than the cartel amount, Teresa decides that she will also increase her production to 50 gallons more than the cartel amount.

After Teresa increases her production, Sam's profit becomes

, Teresa's profit becomes

, and total profit (the sum of the profits of Sam and Teresa) is now

.

True or False: Based on the fact that both Sam and Teresa increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity.

True

False

Note that Sam and Teresa started by behaving cooperatively. However, once Sam decided to cheat, Teresa decided to cheat as well. In other words, Teresa's output decisions are based on Sam's actions.

This behavior is an example of   .